Financial Secretary Office News

Financial Secretary Office News

Itikianga Tinamou Ora – the Cook Islands and New Zealand, evolving and dynamic

Category: Financial Secretary Office News

Prime Minister Puna delivered a keynote address to a full house of more than 100 drawn from New Zealand Government, the diplomatic corp, business and academia in the Legislative Council Chamber in Parliament Buildings at an event hosted by the New Zealand Institute of International Affairs (NZIIA) on Wednesday 4 April.

Since its establishment in 1934, NZIIA has played a valuable role in promoting discussion and understanding of international issues and emerging trends, especially from a New Zealand perspective.

The topic for the speech was Itikianga Tinamou Ora: The Cook Islands in Free Association with New Zealand. Prime Minister Puna stressed the importance of the relationship “which is founded on close historical and cultural ties, unique constitutional arrangements, strong people to people ties and shared values and have endured and strengthened over time.”

The relationship was underpinned by the notion of Itiki as “the ties that bind” and also likened to the characteristics of tinamou meaning steadfast, enduring and permanent as well as ora which is alive, living and dynamic.

Prime Minister Puna emphasised the “relationship of free association has been an enduring, evolving and living partnership and must continue to be so as we look to the future.” The Cook Islands continues to value this special relationship with New Zealand and is committed to maintaining the current citizenship status.

In keeping with the core focus of the NZIIA, the Prime Minister also expanded on the theme of the Cook Islands place in the international arena and especially in the Pacific. New Zealand’s Pacific re-set was welcomed and would contribute to a deeper understanding of the region. Although the Pacific is turning into a contestable space, the Cook Islands were comfortable in dealing with newer partners in a collaborative manner. This partnership approach was taken in the ground breaking project Te Mato Vai where the Cook Islands, New Zealand and China are showing that the Pacific can be a region of cooperation, and through partnerships, can bring about transformational change in the region.

The issue of Official Development Assistance was raised in the speech and the way in which the Cook Islands were looking to “re-set our partnerships to move beyond a development focus to one of equality and mutual benefit.”

The Prime Minister also highlighted the challenges facing the Cook Islands in terms of climate change, ocean management, communications, economic development and growing security threats.

The NZIIA session concluded with a question and answer session with all the Cook Islands Ministers fielding a number of questions from the audience ranging from citizenship, cultural identity, and the nature of the constitutional relationship.

Press Release: False declarations result in successful prosecutions

On 21 March 2018 Cook Island Customs (Customs) successfully prosecuted the captain and engineer of the Ecuadorian flagged vessel the Nino Maravilla which is currently berthed at Aitutaki.

The two offenders were prosecuted under section 261(1) (a) and (c) of the Customs Revenue and Border Protection Act 2012 for providing false declarations on entry into the Cook Islands. This is the first time Customs have brought a prosecution under this provision. The offences carry a maximum fine of $3,000 when heard before a Judge.

Both offenders held prior criminal convictions for which they had served prison sentences in the US and were subsequently deported for. Both offenders failed to disclose this information when completing their arrival cards.

Both matters were heard before three Justices of the Peace at the Court in Aitutaki. Counsel for Customs, Geraldine Ryan, emphasised the seriousness of the offending, and stressed the importance of the protection of Cook Islands borders.

In delivering their sentence the Justices of the Peace found the defendants guilty in all respects. The court handed down the maximum fine allowable by Justices of the Peace, being $1,000 for each offender with court costs of $50 per offender.

As a result, clear precedents have been established for future Customs prosecutions under this provision. The outcomes represent a significant win for Customs, and sends a strong message that Customs are serious about border protection and will not tolerate breaches of its law.

The outcome also highlights the result of excellent collaboration at the border between local law enforcement agencies as well as international agencies such as the New Zealand Customs Service, Australian Federal Police and United States Department of Homeland Security who provided crucial intelligence and on ground support during the operation.

[End]26 March 2018

PRESS RELEASE: Cook Islands Graduation from Official Development Assistance

Category: Financial Secretary Office News

Following strong economic growth in 2014, 2015 and 2016, the Cook Islands Government was notified by the Organisation for Economic Cooperation and Development (OECD) that it was on the list of countries that was likely to reach high income status by 2017. This list is utilized by the OECD’s Development Assistance Committee (DAC) to determine eligibility for Official Development Assistance (ODA).

In June 2017 a Cook Islands’ Government official, together with New Zealand Ministry of Foreign Affairs and Trade (MFAT) Officials, visited Paris to present an argument to the OECD for additional time to address gaps in the current economic data on the Cook Islands. Key to this argument was that graduation should be based on Gross National Income (GNI) data. The Cook Islands does not currently produce this data, as a result Gross Domestic Product (GDP) was being used to determine eligibility.

The problem with this approach is that primary income, or rents that flow in and out of the economy, are not included in GDP statistics. In this case, like in many small island economies, the Cook Islands measurement of GNI is likely to be much lower than GDP. It is possible that GNI will be below the ‘high income’ threshold required for graduation.

If the Cook Islands graduates prematurely due to inadequate data, this could have serious long-term negative consequences for economic development. Key issues to consider in the case of premature graduation are; the high cost of running government due to the geography of the Cook Islands, with many islands scattered over a large distance, vulnerability to natural disasters and economic downturns in Australia and New Zealand, and the cessation of community development programs most of which is funded by ODA.

In July 2017, the OECD agreed to provide the Cook Islands until the end of 2018 to develop GNI data. Since this time, the National Statistics Office of the Ministry of Finance and Economic Management (MFEM) has been working closely with MFAT and the International Monetary Fund’s Pacific Financial and Technical Assistance Centre (PFTAC) on the development of this data.

At this stage, revisions are being made to our GDP (economic growth may not have been as strong as we thought). In addition, flows out of the country have been picked up that suggest that GNI will be lower than GDP. Therefore, it is possible that the Cook Islands will not graduate. Much more work needs to be undertaken over the next 15 months to determine the level of the Cook Islands’ economic development and the Cook Islands Government acknowledge with appreciation the support of the Governments of New Zealand and Australia, as well as the IMF for the current work on economic data.

In addition to the work being done on the Cook Islands economic data, the Cook Islands Government is undertaking an analysis on the sectors that would be affected in the event of graduation, to inform a possible transition plan in the event of graduation. It is envisaged that the Public Sector Leaders Conference on 23-24 October 2017 will also serve as a platform to engage with stakeholders on programs/projects that could be affected by graduation in order to provide the Government with a clearer picture of fiscal, social and economic implications.